Twitter May Finally Have a Business

It expects to reach $1 billion in revenues by 2014

According to a report on Bloomberg, Twitter is forecasting that it will reach $1 billion in revenues by 2014. This would certainly be impressive since it looks like the company posted revenue of about $140 million last year. That would mean Twitter is expecting a ramp of about 7x.

How is this possible? Unlike many other top social sites, it looks like Twitter could be an ideal platform for monetizing mobile traffic. Hey, users can only include up to 140 characters in a tweet, and many of them include links.

In other words, users are accustomed to clicking on links while on Twitter. And that’s something advertisers like. It’s measurable and a way to get potential customers to an advertiser’s site.

It’s similar to Google (NASDAQ:GOOG), which has generated a massive business from online ads. In fact, Twitter CEO Dick Costolo was an executive at the search giant. It looks like a he learned a lot while at Google.

When it comes to monetization, Twitter has certainly been a underutilized asset. It took Facebook (NASDAQ:FB) about six years to get to $1 billion in revenues. Zynga (NASDAQ:ZNGA) took five years, and Groupon (NASDAQ:GRPN) needed only four years. Assuming Twitter is right about its forecast, it will have taken eight years.

If Twitter wants to have a strong valuation — and to eventually come public — it’s time to get serious about pursuing a business model. All in all, it may actually have found an approach that could make a big impact on the company.

Based in Silicon Valley, Tom Taulli is in the heart of IPO land. On a regular basis, he talks with many of the top tech CEOs and founders trying to find the next hot deals and finding out which start-ups are stinkers.

A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.

Tom is routinely quoted in the media about upcoming deals with his interviews on CNBC and Bloomberg TV, but he is eager to take your questions too. You can message him on Twitter at @ttaulli. And feel free to weigh in via the comments section on any of his IPO Playbook posts.